On June 8, 1994, Hewlett-Packard and Intel announced a bold collaboration to build a next-generation processor called Itanium, intended to remake the computing industry.

Eleven years and billions of dollars later, Itanium serves instead as a cautionary tale of how complex, long-term development plans can go drastically wrong in a fast-moving industry.

Despite years of marketing and product partnerships, Itanium remains a relative rarity among servers. In the third quarter of this year, 7,845 Itanium servers were sold, according to research by Gartner. That compares with 62,776 machines with Sun Microsystems' UltraSparc, 31,648 with IBM's Power, and 9,147 with HP's PA-RISC.

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The recent delay in the release date for the first dual-core Itanium underlines the shrinking ambitions and scope of the Intel processor, once vaunted as an industry-changing chip.

Bottom line:The chip's story serves as a cautionary tale of how complex, long-term development plans can go drastically wrong in a fast-moving industry.

But perhaps most significant, it compares with 1.7 million servers with x86 chips, based on an architecture Itanium was intended to replace.

"At the original launch, the claims from HP and Intel were essentially saying, 'If you're not with us, you're going to die. We're going to be the chip that runs everything,'" said Illuminata analyst Jonathan Eunice. "It so happens that promise has largely been achieved, but with x86."

The saga illustrates the risks of such sweeping strategies. While grand plans offer the promise of major rewards, long development cycles mean many more chances to stumble or be overtaken by unanticipated events--such as x86's longevity. Itanium isn't a unique example; Microsoft's ambitious "Longhorn" version of Windows has been delayed and pared back several times, meaning that some technology the company hoped to release in the 1990s won't show up until 2006 or later.

Itanium did vanquish two rival chip families: Compaq's Alpha and Silicon Graphics' MIPS. It also has respectable performance and is gradually replacing the PA-RISC family from HP, which sold 79 percent of all Itanium servers in the third quarter of 2005, according to Gartner figures.

But the processor's long history has more notably been marked by a series of missteps that undermined its heir-apparent status.

The latest problem cropped up in late October, when Intel announced that the release of the first dual-core Itanium, code-named Montecito, would be delayed from 2005 until mid-2006. Earlier problems included other delays, poor initial performance and software incompatibility with the processors it was designed to replace.

The future looks unlikely to get better, said Kevin Krewell, editor-in-chief of industry newsletter Microprocessor Report. "It's not promising. It has a space that will be there for a number of years, but it's been marginalized," Krewell said. "It's not hard to see that Itanium is not going to go much beyond the niche of replacing Alpha and PA-RISC."

Billions invested
Intel and HP are mum about how much money has been invested in the project. But some data points are clear. Albert Yu, general manager of Intel's microprocessor products group, was quoted in Electronic Engineering Times in 1994 as saying the joint development effort for Itanium would entail an investment of $400 million to $500 million over several years.

But the project grew well beyond that price tag as it slipped and backers had to pump funding into a massive effort to get third parties to revamp software for the new chip family. Several analysts estimate the cost as multiple billions of dollars, and the spending hasn't stopped: In December 2004, HP pledged to spend a further $3 billion to fund Itanium-related software, hardware and marketing work.

"The fact that they spent so much money to develop Itanium implies to me they expected an equally huge return on that investment," said Linley Group analyst Linley Gwennap, who followed Itanium closely for years for Microprocessor Report.

Intel and HP acknowledge they've had challenges with Itanium but staunchly defend the effort. "I think it's doing very well," said Lisa Graff, general manager of Intel's high-end server group. She points to gains in Itanium's scaled-back mission of replacing Power, UltraSparc and other reduced instruction set computing (RISC) chips and observes that half of the world's 100 biggest companies use Itanium systems.

"I think Itanium is still the architecture for the next 20 years," Graff said. "It's the newest architecture that has come out. It has the headroom. I think the RISC architectures will run out of steam."

About the author

Stephen Shankland has been a reporter at CNET since 1998 and covers browsers, Web development, digital photography and new technology. In the past he has been CNET's beat reporter for Google, Yahoo, Linux, open-source software, servers and supercomputers. He has a soft spot in his heart for standards groups and I/O interfaces.
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